Dollar Drops on Trade Talks, Treasury Yields Rise

The dollar fell while European stocks climbed alongside U.S. equity futures on renewed hopes for a de-escalation of trade tensions. The yuan jumped and Treasuries dipped.

The Stoxx Europe 600 Index rose with all but a handful of sectors in the green. Futures on the S&P 500, Dow and Nasdaq all gained, while the greenback — which has seen recent strength on its role as a haven — fell for the first time in six days. Stocks stayed lower in most Asian markets in the wake of disappointing earnings from tech giant Tencent Holding, though pared declines after China said its vice commerce minister will visit the U.S. for talks in late August. Hopes on trade gave China’s offshore yuan a boost. Emerging-market shares slipped, flirting with a bear market.

The potential for a breakthrough in the trade standoff between China and the U.S. is helping shake off some of the caution that’s weakened risk assets over the past week. The lira continued to strengthen Thursday after Turkey moved to deter short-selling of the currency while Qatar promised to invest $15 billion in the country’s economy.

Elsewhere, metals rebounded after a hammering Wednesday. In Hong Kong, currency interventionscontinued after the currency fell to the weak end of its trading band.

Key events coming up this week:

• Earnings are still to come from companies including Maersk and Carlsberg.

• Brexit talks between the EU and the U.K. resume in Brussels Thursday.

Main moves in markets:

Stocks

• The Stoxx Europe 600 Index climbed 0.2 percent as of 8:18 a.m. London time.

• Futures on the S&P 500 Index jumped 0.3 percent.

• The U.K.’s FTSE 100 Index advanced 0.2 percent.

• Germany’s DAX Index advanced 0.3 percent, the biggest gain in a week.

• The MSCI Emerging Market Index dipped 0.2 percent, hitting the lowest in about 13 months with its seventh straight decline.

• The MSCI Asia Pacific Index fell 0.5 percent to the lowest in almost 11 months.

Currencies

• The Bloomberg Dollar Spot Index sank 0.2 percent, the first retreat in more than a week and the largest decrease in more than two weeks.

• The euro increased 0.2 percent to $1.1373, the biggest increase in more than a week.

• The British pound climbed 0.1 percent to $1.2713, the largest climb in more than two weeks.

• The Japanese yen fell 0.1 percent to 110.85 per dollar.

Bonds

• The yield on 10-year Treasuries climbed one basis point to 2.88 percent.

• Germany’s 10-year yield advanced one basis point to 0.31 percent.

• Britain’s 10-year yield increased one basis point to 1.225 percent, the largest increase in more than a week.

• Italy’s 10-year yield declined two basis points to 3.151 percent.

Commodities

• West Texas Intermediate crude climbed 0.2 percent to $65.17 a barrel.

• Gold gained 0.1 percent to $1,175.64 an ounce, the biggest rise in more than a week.

Source: Bloomberg